Written by

Detroit Free Press Staff Writer

Emergency manager Kevyn Orr said the city could soon decide what to do next, now that the federal bankruptcy judge has rejected the city’s second proposed swaps settlement.

Orr said the city may announce within a matter of days what it intends to do now that U.S. District Judge Steven Rhodes rejected a deal for the city to pay two banks $165 million to end a swaps deal that Detroit entered into in 2005 to shore up $1.4 billion in pension underfunding. Rhodes suggested that the city might have a fair shot at challenging the controversial swaps deal, and Orr said, that if better terms can’t be negotiated, that “might well require” the city to sue to have the swaps voided.

Orr was among several public officials presenting information to the city-state Financial Advisory Board on Tuesday.

Gary Brown, the public services director for Mayor Mike Duggan, told members of the advisory board that a plan is emerging in which Detroit bus riders likely would have to pay more for a one-way trip, but the city also would restore some of the dozens of routes it has eliminated or trimmed in recent years.

He said the city is working on a plan to raise fares by as much as $1 per ride — to $2.50 from the current $1.50 — by 2022. Brown said he initially proposed raising fares by 25 cents every other year to gradually phase in the increases, but Dan Dirks, Duggan’s new director of DDOT, suggested instead immediately going to $2 per trip and phasing in the last 50-cent increase over the later years of the plan.

But the fare increases would come with a promise of restored routes that have left a bare-bones bus service that leaves too many Detroiters unable to get to jobs, Brown said, adding the city has trimmed $30 million from its annual DDOT subsidy, achieved through layoffs of drivers and mechanics and reduction of bus routes.

Brown also said the city is creating a transit security division separate from the police department to police the bus system, saying that Detroit is the only city of its size that doesn’t have dedicated transit security.

Orr also told the board that there are signs of some progress in mediation, but “we’re coming down to crunch time” because his tenure ends Sept. 25, leaving only about nine months for him to complete his work. He said that he hopes to have the city’s plan of adjustment filed in court sometime in February.

Duggan said he hoped to have a legal team in place in the next few weeks that would be dedicated to going after owners of derelict properties or abandoned homes, forcing them to either maintain the buildings or risk losing the property to the city.